WASHINGTON – America's trade deficit unexpectedly jumped to a record high in August, providing ammunition for Democrats to attack Republican trade policies in the closing weeks of the fall election campaign.

The gap between what the United States exports and what it imports rose by 2.7 percent to $69.9 billion, marking the second straight month it has set a record, the Commerce Department reported yesterday.

Wall Street, which had been looking for a slight improvement in August, shrugged off the disappointing trade report and sent stocks to a fifth record close this month. The Dow Jones industrial average gained 95.57 points to close at 11,947.70.

The deterioration in trade was led by another record foreign oil bill, which pushed imports up to an all-time high, swamping a solid increase in exports, which also set a record.

The politically sensitive trade deficit with China also set a monthly record at $22 billion.

The deficit with China shot up by 12.2 percent and is running 13.5 percent above last year, when it hit $202 billion, the highest ever recorded with a single country.

With oil prices falling from the $77-per-barrel level set in July to less than $60 per barrel this week, analysts said the August figure could be the peak for the deficits. But they cautioned that any improvement will come slowly, given the huge gap between what America imports and what U.S. companies are able to sell overseas.

Democrats, hoping to take control of the House and Senate from Republicans, contend the August deficit underscored the need for a change in trade policies being pursued by President Bush and the Republican Party.

They said the administration has failed to crack down on unfair trade practices of other nations, including China's currency manipulation and its widespread piracy of U.S. goods.

Democrats hope those arguments will resonate with voters, especially in the Rust Belt states of the Midwest and Northeast, which have been battered by the loss of nearly 3 million U.S. manufacturing jobs since 2001.

Private economists said the worsening trade deficit would likely shave as much as 0.8 percentage points off overall economic growth in the third quarter. Many analysts believe the economy will grow by 2.5 percent or less in the second half of the year, reflecting a sharp slowdown in the once-hot housing market.